We are very thankful that Bret Cohen and Sian Rudgard took some time out of their busy schedules at the international law firm of Hogan Lovells to answer this humble blogger’s questions on the General Data Protection Regulation (GDPR). Thanks Bret and Sian!
Bret writes regularly on GDPR for HL’s Chronicle of Data Protection blog, one of our favorite resources. Sian had worked at the ICO, the UK’s data protection authority, and helped draft the binding corporate rules (BCR) governing internal transfers of personal data within companies for the EU’s Article 29 Working Party.
So we’re in good hands with these two. Both are now part of HL’s Privacy and Cybersecurity practice. The interview (via email) is heavily based on questions our own customers have been asking us. We’re very excited to share with you their legal expertise of the GDPR.
Inside Out Security: When exactly is a data controller required to conduct a data protection impact assessment (“DPIA”)? Must the controller always undertake a DPIA for new uses of certain types of data (e.g., biometrics, facial images)?
Hogan Lovells: The DPIA requirement is linked to processing “likely to result in a high risk for the rights and freedoms of natural persons,” taking into account “the nature, scope, context and purposes of the processing.” This is a fact-specific standard, and one therefore that is likely to be interpreted differently by different data protection authorities (“DPAs”), although it is generally understood to refer to significant detrimental consequences for individuals.
The GDPR requires a DPIA in three specific circumstances:
- Where the processing involves a “systematic and extensive” evaluation of an individual in order to make an automated decision about the individual (e.g., profiling) that has a legal effect on that individuals (e.g., denial of benefits).
- The processing “on a large scale” of sensitive categories of personal data, specifically (a) personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership, (b) genetic data, biometric data for the purpose of uniquely identifying an individual, data concerning health, or data concerning an individual’s sex life or sexual orientation, and (c) personal data pertaining to criminal convictions and offenses.
- A systematic monitoring of a publicly accessible area on a large scale (e.g., through CCTV).
The data protection authorities (“DPAs”) have promised to provide guidance before the end of 2016 on this aspect of the Regulation and the individual DPAs have authority to publish guidance on the kinds of processing operations that require a DPIA and those that do not, and these individual guidance documents might differ from country to country.
IOS: For what types of data and processing would data controllers be required to engage in a “prior consultation” with a DPA?
HL: Data controllers are required to consult with a DPA prior to engaging in data processing where a DPIA indicates that the processing “would result in a high risk” in the absence of measures taken by the controller to mitigate the risk . “High risk” is not defined, but it likely to carry a similar meaning to the threshold DPIA requirement described above: that is, a significant detrimental consequence for individuals. The requirement to engage in a prior consultation will also likely be influenced by DPA guidance on the issue and we can expect further guidance on this point before the end of this year.
IOS: What does a DPIA under the GDPR look like?
HL: A DPIA is not too complicated. A suggested approach is to undertake a review of what the proposed data processing activities involve as against the relevant requirements of the Regulation (transparency, legal basis for processing, data retention, data security, etc). This can be done by creating a standard DPIA template that requires the filling in of these fields which then allows for a final assessment of risk by an assessor who, based on the analysis provided, will recommend the steps to take to address any risks identified..
IOS: A lot of Varonis customers already follow data security standards (principally ISO 27001). Articles 42 and 43 of the GDPR seem to suggest outside, accredited certification and other bodies will have the power to issue a GDPR certification. Does this mean that existing accreditations will be sufficient to comply with the GDPR standard?
HL: Under Articles 42 and 43, DPAs can approve certifications issued by certain certification bodies as creating the presumption of compliance with various parts of the GDPR. However, the relevant DPA or the EU-wide group of DPAs, the European Data Protection Board (currently known as the Article 29 Working Party), would have to approve a particular certification before it can be deemed to be sufficient to comply with the GDPR standard.
The Article 29 Working Party has indicated that it intends to provide further guidance on this topic before the end of 2016.
IOS: The GDPR requires notification of data breaches within 72 hours of discovery, including “the measures taken or proposed to be taken by the controller to address the personal data breach, including, where appropriate, measures to mitigate its potential adverse effects.” What types of “measures to mitigate” the breach’s “potential adverse effects” will be required?
HL:The “adverse effects” mentioned here reference potential adverse effects to the individual. There are no hard and fast rules as of yet, but this standard encourages companies to provide mitigating measures as may be appropriate in a given situation to help protect individuals. This can include information about the offering of credit monitoring services, information about the offering of identity theft insurance, or steps taken to confirm the deletion of the personal data by unauthorized third parties. It is also possible that some DPAs may request information on technical and other remedial security measures taken by the company. The specific requirements are likely to be borne out through additional regulatory guidance and practice.
IOS: When a data subject requests erasure of personal data, does that mean that data must be deleted everywhere the personal data is located (including in emails, memos, spreadsheets, etc.)?
HL: The right to erasure—also known as the “right to be forgotten”— was one of the more controversial aspects of the GDPR when it was first published, not least because the practical limits on a controller’s obligation to delete personal data were unclear. The right to erasure is not unlimited and an organization is only required to erase the data when one of the grounds specified in the Regulation apply. These include that the personal data is no longer needed for its original purpose; the individual withdraws consent, or objects to the processing; the data must be erased in order to comply with a legal obligation to which the controller is subject; the data has been collected in relation to the offering of information society services to children; or the processing is unlawful.
There are exemptions to the erasure right, including where an individual objects to the processing, but the organization can establish an overriding legitimate ground to continue the processing; or where the individual withdraws consent to the processing, and the organization has another basis on which to rely to continue the processing. Other exemptions include where processing is necessary for exercising a right of freedom of information or expression, for compliance with a legal obligation, for reasons of public interest in relation to health care, or for exercising or defending legal claims.
In theory, this means that an organization should take reasonable steps to delete personal data subject to a valid erasure request wherever it resides, although we recognize that there may be practical limitations on the ability of an organization to delete certain information. The DPAs do have the ability under the GDPR to introduce further exemptions to this provision but we do not know yet what these will look like.
Organizations do have room to put forward arguments that they have overriding legitimate grounds to continue processing personal data in certain circumstances. Where consent has been withdrawn in many cases it is also likely that there will be another basis on which organizations can continue to process at least some of the data (e.g., legitimate business interests). Organizations should document the steps they take to comply (or choose not to comply) with erasure requests, to justify the reasonableness of those steps if pressed by a DPA.
Where a data controller has made personal data public (e.g., by publishing it on a website) and receives a valid erasure request for that personal data, the GDPR requires the controller to, “taking account of available technology and the cost of implementation,” take “reasonable steps” to inform other third-party controllers who have access to the personal data of the erasure request.
This is an area on which we can expect further guidance from the DPAs, although it is not in the list of first wave guidance that we are expecting from the Article 29 Working Party this year.
IOS: An organization must appoint a data protection officer (“DPO”) if, among other things, “the core activities” of the organization require “regular and systematic monitoring of data subjects on a large scale.” Many Varonis customers are in the B2B space, where they do not directly market to consumers. Their customer lists are perhaps in the tens of thousands of recipients up to the lower six-figure range. First, does the GDPR apply to personal data collected from individuals in a B2B context? And second, how when does data processing become sufficiency “large scale” to require the appointment of a DPO?
HL: Yes, the GDPR applies to personal data collected from individuals in a B2B context (e.g., business contacts). The GDPR’s DPO requirement, however, is not invoked through the maintenance of customer databases. The DPO requirement is triggered when the core activities of an organization involve regular and systematic monitoring of data subjects on a large scale, or the core activities consist of large scale processing of special categories of data (which includes data relating to health, sex life or sexual orientation, racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, or biometric or genetic data).
“Monitoring” requires an ongoing tracking of the behaviors, personal characteristics, or movements of individuals, such that the controller can ascertain additional details about those individuals that it would not have known through the discrete collection of information.
Therefore, from what we understand of Varonis’ customers’ activities, it is unlikely that a DPO will be required, although this is another area on which we can expect to see guidance from the DPAs, particularly in the European Member States where having a DPO is an existing requirement (such as Germany).
Whether or not a company is required to appoint a DPO, if the company will be subject to the GDPR, it will still need to be able to comply with the “Accountability” record-keeping requirements of the Regulation and demonstrate how it meets the required standards. This will involve designating a responsible person or team to put in place and maintain appropriate policies and procedures , including data privacy training programs.